Property Valuation In Emerging Economies: The Hands On Experience

Businesses, individuals, financial institutions and governments globally require property valuations for several purposes. Property value as a proxy for price is usually determined on the basis of market value. Typical purposes for which property valuation may be required include sale, purchase, mortgage, insurance, rating and stamp duty whilst rental value is determined for a tenancy arrangement or the associated tax payment.This research is indeed, motivated by the view that property plays an important role in the development agenda of all nations. For instance, the expansion of property stock and rise in its market value form part of the accumulation of wealth with successful economic development. As a potential source of tax revenue for central and local governments, especial in emerging economies where cash-based informal sectors hamper the collection of other forms of taxation, property markets will continue to play an important role in national development. And as exemplified by the Asian crisis in the late 1990s, incorrectly valued and unstable property markets are major risk components for the banking and financial systems (Renaud and Mera, 2000).The credibility, reliability and accuracy of property value determination in emerging economies are therefore critical. This paper examines the practice of property valuation in Ghana to establish that five underlying requirements – Property Valuation Guidelines and Standards, electronic database, automated property valuation, research and development, and property market intermediaries – are a necessity for the development of the valuation profession. The research concludes that these requirements are the corner pillars to promote property market development in Ghana, which may also be applicable to other African countries with similar property market characteristics.